Inequality and Labor Market Institutions

Resource type
Authors/contributors
Title
Inequality and Labor Market Institutions
Abstract
[E]xamines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants. The evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality. The results, however, also suggest that a lack of representativeness of unions may be associated with higher inequality. These findings do not necessarily constitute a blanket recommendation for higher unionization and minimum wages, as country-specific circumstances and potential trade-offs with other policy objectives need to be considered. Addressing inequality also requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.
Report Number
15/14
Series Title
Staff Discussion Note
Place
Washington, DC
Institution
International Monetary Fund
Date
15 July 2015
Pages
30
Accessed
2/22/16, 5:44 PM
Citation
Jaumotte, F., & Osorio, C. (2015). Inequality and Labor Market Institutions (No. 15/14; Staff Discussion Note, p. 30). International Monetary Fund. http://www.imf.org/external/pubs/cat/longres.aspx?sk=42987